Equity Capital Markets and Advisory Business, Auctus Advisors

Auctus Advisors

Equity Capital Markets and Advisory Business

Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector. The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy. Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors. Auctus provides Corporate Broking, Equity Research and Investment Banking services.

Equity Bottom-Up

<ul><li>1Q23 production stood at 2,607 boe/d, which is in line with our forecasts.</li><li>The company held ~US$12 mm in cash, which is line with previous indications.</li><li>Southern has achieved drilling cost efficiencies and the cost of drilling and completing new wells is expected to be around US$5.7 mm.</li></ul>

1Q23 production stood at 2,607 boe/d, which is in line with our forecasts.The company held ~US$12 mm in cash, which is line with previous indications.Southern has achieved drilling cost efficiencies and the cost of drilling and completing new wells is expected to be around US$5.7 mm.

Southern Energy Corp. (SOUC LN/SOU CN): Drilling Cost Down.

<ul><li>Southern is acquiring the remaining producing acreage (&gt;8,500 acres) in the Gwinville field it does not own from PetroTx Energy for US$3.2 mm in cash.</li><li>PetroTX will also be granted a minor overriding royalty over two of the acquired wells that were previously producing 0.4 mmcf/d.</li><li>The transaction adds 400 boe/d net production, 1.8 mmboe PDP reserves and 14.5 mmboe 2P reserves (+57% versus the YE22 2P reserves of 25.5 mmboe) in the Selma Chalk to Southern with 20+ new drilling locations.</li></ul>

Southern is acquiring the remaining producing acreage (&gt;8,500 acres) in the Gwinville field it does not own from PetroTx Energy for US$3.2 mm in cash.PetroTX will also be granted a minor overriding royalty over two of the acquired wells that were previously producing 0.4 mmcf/d.The transaction adds 400 boe/d net production, 1.8 mmboe PDP reserves and 14.5 mmboe 2P reserves (+57% versus the YE22 2P reserves of 25.5 mmboe) in the Selma Chalk to Southern with 20+ new drilling locations.

South Energy Corp. - Taking Advantage of Low Gas Price to Make an Accretive Acquisition

<ul><li>There were no surprises in the FY22 financials with production, cashflow and working capital very close to our expectations.</li><li>The 18-10 #2 Upper Selma Chalk well that was completed in 1Q23 is performing in line with expectations.</li><li>Peak gas rates are not expected until the load fluid recovery is closer to 20%, which is expected towards the end of 2Q23.</li></ul>

There were no surprises in the FY22 financials with production, cashflow and working capital very close to our expectations.The 18-10 #2 Upper Selma Chalk well that was completed in 1Q23 is performing in line with expectations.Peak gas rates are not expected until the load fluid recovery is closer to 20%, which is expected towards the end of 2Q23.

South Energy Corp. - FY22 Financials in Line. Operations on Track

Canada

Southern Energy Corp. operates as an oil and natural gas exploration and production company. The Company focuses on developing conventional and unconventional light oil and liquids rich natural gas resources. Southern Energy serves customers in Canada and the United States.

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Southern Energy Corp (SOUC LN)